Congress finally awakening to growing crises in home care
By MATTHEW HAY
HHBR Washington Correspondent
WASHINGTON There is now a clear and growing consensus in Congress that the Balanced Budget Act of 1997 (BBA) had major unintended consequences on Medicare’s home health benefit that must be corrected. That consensus was reflected in last week’s Senate Finance Committee hearing that focused considerable attention on these problems, as well as a hearing later the same day before the Senate Permanent Subcommittee on Investigations that was devoted exclusively to problems confronting Medicare’s home health benefit (see related story).
The BBA included $115 billion in Medicare cuts over the FY98-FY02 period aimed at balancing the budget by 2002, along with a vast array of regulatory changes in home health and other facets of the Medicare program. The Finance Committee’s aim at the June 10 hearing was to examine the crippling effect the interim payment system (IPS) and other changes mandated by the BBA have had on the home health benefit. The committee also examined the skilled nursing facility prospective payment system (PPS) and the outpatient therapy limit of $1,500, as well as the outpatient hospital PPS.
The clear sense at the hearing was that many committee members were not swayed by the General Accounting Office (GAO; Washington) report released earlier this month that concluded that beneficiary access to home health services has not been badly damaged despite the growing number of agency closures. Instead, the committee zeroed in on the magnitude of the reduction in home health spending and the adverse impact it is having on the sickest beneficiaries.
MedPAC chief reports to Congress
Gail Wilensky, chair of the Medicare Payment Advisory Commission (MedPAC), told the committee the jury is still out on the BBA’s impact on home health services. She based her remarks on MedPAC’s report, issued two weeks ago. According to Wilensky, data since the BBA was enacted are extremely limited, which makes it difficult to isolate its effects. "The BBA enacted the most far-reaching changes to the Medicare program since its inception," she said. "To expect legislation as sweeping as the BBA to achieve this objective flawlessly is unrealistic." But she added that there is "no evidence that wholesale changes in the BBA are either necessary or desirable.
"For home health services, we have seen lower-than-expected outlays, closures of home health agencies, and declines in the use of services," she told the committee. "But our interpretation of these findings is clouded by other policy changes, notably HCFA’s efforts to cut down fraud and abuse in the home care industry."
MedPAC also found that some agencies no longer accept or curtail services to certain types of patients and that some beneficiaries are having more difficulty obtaining services, Wilensky said. "These findings are consistent with the claim that the IPS has hampered access, but they do not tell the whole story," she added. She argued that "numerous concurrent policy changes" have contributed to these changes, including stepped up anti-fraud efforts by HCFA through increased oversight of home healthcare providers, a four-month moratorium on the certification of new agencies in early 1998, as well as an array of regulatory changes.
"Changes in the use of home health services may also reflect confusion about the IPS on the part of home care providers," said Wilensky. She said anecdotal evidence suggests that some home health agencies have interpreted the per-beneficiary limits to apply to specific Medicare beneficiaries rather than the agency’s average cost per beneficiary as intended by the BBA. "Thus, some agencies may be failing to recognize that costs for beneficiaries who use a large number of visits can be balanced against the costs of short-stay users," she said.
Wilensky also told the committee that it is impossible to determine whether the changes in use of home health services that have been observed during the past two years are "appropriate" because Medicare’s standards for eligibility for and coverage of home health services are "too loosely defined." She cited MedPAC’s recommendations that the secretary of Health and Human Services (HHS; Washington) rapidly develop regulations that outline home healthcare coverage and eligibility criteria based on the clinical characteristics of beneficiaries along with recommendations to Congress on how to implement them.
HCFA, GAO and CBO defend IPS
MedPAC is a Congressional advisory body, but representatives of government agencies present at the hearing were even more uncompromising in their defense of the home health IPS. Robert Berenson, director of HCFA’s Center for Health Plans and Providers, told the committee the BBA "closed loopholes that had invited fraud, waste, and abuse." For example, he said, it eliminated the practice of billing for care delivered in low cost, rural areas for care from urban offices at high urban-area rates. "It tightened eligibility rules so patients who only need blood drawn no longer qualify for the entire range of home health services," he added. Berenson also said that HCFA still expects to have the PPS for home health in place by the Oct. 1, 2000, statutory deadline. "We expect to publish a proposed regulation this October so we can begin receiving and evaluating public comments, and a final rule in July 2000," he said.
The GAO’s William Scanlon took a slightly different spin. He weighed in that agencies "will need time to adapt" to the BBA’s changes, but argued that calls to amend or repeal the new payment systems are "premature." He said the number of participating agencies declined by 14% between October 1997 and January 1999 and that utilization has dropped to 1994 levels. But he reiterated the GAO’s argument that the number of home health agencies, as well as utilization, have both grown dramatically over the previous decade and that beneficiaries are still served by more than 9,000 agencies. Moreover, he said, the recent decline in the number of agencies has not impaired beneficiary access.
Scanlon also said that the drop in utilization does not appear to be related to agency closures, but is instead "consistent with IPS incentives to control the volume of services." He added that some of the decline in utilization appears to involve "greater sensitivity to who qualifies for the home healthcare benefit."
Scanlon did say that there is evidence that beneficiaries who are likely to be costlier to serve than the average may have more difficulty than before in obtaining home health services because the revenue caps imposed by the IPS are not adjusted to reflect variations in patient needs. "This problem should be ameliorated with the implementation of the PPS," Scanlon said. But, he added, it will be essential that HCFA adequately adjust payments to account for the wide differences in patient needs.
Paul N. Van de Water, assistant director for Budget Analysis at the Congressional Budget Office (CBO; Washington) told the committee that the IPS for home health is the one area in which CBO may have significantly underestimated savings. "CBO’s current projection of outlays for home health services is much lower than projected in August 1997, he said. But, he said, those lower projections are largely attributable to new information about the effects of Operation Restore Trust and other antifraud initiatives, as well as increases in the interval between the provision of services and payment.
"The use of home health services seems to have dropped substantially, probably as a result of both antifraud activities and an unexpectedly cautious response by home health agencies to the per-beneficiary limit under the interim payment system," he said. While that limit applies to aggregate payments, he added, some agencies apparently believe that the limit applies to each beneficiary and are cutting off services to patients who have reached the per-beneficiary limit. "Thus, the average payment per beneficiary is well below the allowable amount."
NAHC lays out industry agenda
Mary Suther, chairwoman of the board of the National Association for Home Care (NAHC; Washington), laid out the industry’s concerns before the committee. Suther urged the committee to "take a closer look" at the recent findings of both the GAO and MedPAC, which she said minimized the problems in the home care industry. "Both GAO and MedPAC found that beneficiaries are losing access to home care services," she said. She pointed out that both studies admitted that the number of visits per patient, admissions and overall number of agencies have been reduced significantly. "Both reports confirm that the beneficiaries who are most costly to treat are at risk for losing access to care," she added.
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